Champlin & Associates Financial Insights

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CHAMPLIN & ASSOCIATES • CREATING YOUR FINANCIAL ROAD MAP TO SUCCESS

FINANCIAL

COMMUNITY MATTERS 10 Debunked Myths of Financial Planning • 9 Questions to Ask Before Hiring a Financial Advisor

A Message from Brad and Amanda

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e are believers that everything happens for a reason. The fact that you’re reading this right now is not insignificant. We appreciate you taking the time to flip through Financial Insights and we trust that you will walk away with at least one piece of valuable information.

“If you don’t know where you are going, you’ll end up someplace else.”— Yogi Berra We’ve complied information and resources that we believe will enlighten and provide clarity on whether you’re on the right track towards an abundant retirement and a bright and fulfilling financial future.

With utmost respect,

Brad Champlin & Amanda Williams

BRAD L. CHAMPLIN is a recognized financial educator, author, speaker and retirement advisor, whom you may have seen on or in NBC, ABC, CBS, and FOX network affiliates and Yahoo Finance, Wall Street Journal’s Market Watch, Buffalo News and others. He is the Co-Author of Retire Abundantly and Retire Like a Shark and Founder/CEO of Champlin & Associates, where he and his team have been helping business owners, independent women and career professionals reduce taxes, increase retirement income, and create a lasting legacy.

AMANDA L. WILLIAMS is a financial educator, author and financial advisor, whom you may have seen on or in NBC, ABC, CBS, and FOX network affiliates and Yahoo Finance, Wall Street Journal’s Market Watch, Buffalo News and others. Amanda is the Co-Author of Retire Abundantly and Retire Like a Shark and President of Champlin & Associates.

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Financial Insights • 2022

Contents 2 8 14

A Message from Brad and Amanda Our Team Services and Process

Highlight / Spotlight

4 6 7

Home Start Hope Mercy Flight J2 Medical Supply Intivity

Community Matters

10 11

Champion Academy

4

American Cancer Society Rochester Rotary

Insights

12 16 18 20 21 22 23

10 Debunked Myths of Financial Planning Avoiding the New York Estate Tax Cliff Seven Financial Metrics Every Entrepreneur and Small Business Owner Needs to Master

6 11

9 Questions to Ask Before Hiring a Financial Advisor What Clients Say Reading Into Success More of What Clients Say

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WHAT C OULD Y OU LIV

highlight / spotlight

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OUT ?

?

Home Start Hope Silverwa re?

Towels?

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OUR VIS

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E FOLL

Homelessness can happen to anyone Towels Shower curtain & rings

by Kristin Mathis Blanket Comfort er

Dishes Silverw are Glasses Cutlery

tray Dish rack

Dish clot

hs/ towels Pot hol ders Pots & p ans

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OWING

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at Waste b asket Laundry basket

Iron Ironing Board

BEDRO OM Sheets Mattres s Pad

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Baking

pan

Cookie sheet Cutting board Coland er Paring knife Vegeta ble peeler Measurin g cups/sp oons

homesta rthope.o rg Fi

Can op ener Coffee maker Tea pot Toaster Mop/bu cket Broom/d ustpan Garbag e can Wall cloc k

H

ome Start Hope is a 100 percent volunteer run organization that Serving Ro supports women and children inchester wome n since 20 their transition from homelessness to independent living. They serve women who have experienced homelessness including veterans, women recovering from addiction and survivors of domestic violence. Providing access to brand new, essential household items free of charge in a personal shopping experience, they restore hope and selfconfidence and build a community where more women can thrive.

Women choose everything they need to start over in their new home completely free of charge.

It may seem like a small thing, picking out towels or bedding, but for women who are starting over, it’s so much more than that. It’s about a new beginning, a sense of ownership and sense of hope for a brighter future.

When they feel settled at home, they can focus on their families.

Since 2010, Home Start Hope has met the needs of more than 600 women and children.

HOW IT WORKS Community Partners refer women once they are ready to transition into independent housing. Together they complete the application and schedule an appointment to visit Home Start Hope.

Home Start Hope volunteers help them select all they need for their new home.

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Financial Insights • 2022

ook!

Donate Today!

ON

storing ho steem a pe, n men on d their fficienc y.

starting

with no

IS A SC ARY PL

thing

HomeStartHope.org

VISION

ACE TO S

TART

To be a leader in restoring hope, rebuilding self-esteem and empowering women on their journey to self-sufficiency.

COMMUNITY PARTNERS

Bethany House Family Promise of Greater Rochester & Ontario County Willow Domestic Violence Center YMCA of Rochester & Monroe County Tempro Emergency Shelter Coldwater Women & Children’s Residential Home Catholic Charities Community Services Villa of Hope Plus more to come!

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Home S

tart Hop e provid brand n es ew esse ntial househo ld items to wom rebuildin en g their li ves.

010

WAYS YOU CAN HELP What could you do today that would change a woman’s life here in 1/2 8/18 8:1 2 PM Rochester?

• Get involved as a volunteer or Board member • Organize a donation drive • Stock our shelves by shopping our Target registry or donating gift cards • Attend, sponsor, or donate items for our fundraisers • Make a monetary donation Whether you give household items, money, or your talent, you are helping neighbors in need move forward in

their lives. Home Start Hope is a 100% volunteer run organization that relies on donations. Your generosity makes it possible for them to continue this unique service.

FOR MORE INFORMATION P.O. Box 858 Webster, NY 14580 (585) 506-5003 HomeStartHope.org Home Start Hope is a not-for-profit 501(c)(3) tax-exempt organization.

Donations are tax-deductible to the extent allowed by law.

Fed Tax Id # 27-4295948

“S

omething I really like to talk about with people is the dignity piece. How it’s not about the stuff, while

it’s important and necessary, it’s so much more than that.

After going through an unimaginably difficult time, being

Practical Items to Donate

What can you live without?

A pillow?

so worn down and worn out, they can come to us and have some fun shopping. It’s clean, bright and pretty. They have choices for a change! The volunteers are friendly and welcoming. It obviously relieves a great deal of financial

Silverware?

burden and stress. They come in a little nervous and not

Towels?

sure what to expect but they leave laughing and excited.

A blanket?

– Kristin Mathis, President/CEO

The best part is watching them loosen up and have fun.”

2022 • champlinandassociates.com

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highlight / spotlight Mercy Flight MISSION: An independent, non-profit organization of air medical professionals, devoted to integrity, compassion, and excellence providing critical care to the sick and injured.

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ercy Flight Central was founded as a non-profit in 1992 to provide air medical services to New York State residents and beyond. Since its inception, the organization has served more than 15,000 patients and grown to approximately 70 employees. MFC’s three base locations serve the regions of the Finger Lakes, Central New York, and Mohawk Valley, including service to the Lower Adirondacks. The organization began operations as an advanced life support air ambulance service and has since expanded to become New York’s premier critical care air medical service with three helicopters staffed 24/7/365. The aircraft utilized in transports includes helicopters that can travel within a 150-

mile radius of Mercy Flight Central’s base locations.

Mercy Flight Central provides the highest level of pre-hospital critical care to patients. Each helicopter is equipped with state-of-the-art medical equipment that includes advanced airway management, cardiac monitoring, and ultrasonography devices. Our Flight Nurse and Flight Paramedic teams are highly trained and experienced in critical care. Air medical teams care for critically ill and injured patients requiring advanced treatment and rapid air medical transport to specialized medical centers across the northeast. Together these elements allow Mercy Flight Central to deliver a high level of critical care to the scene of an accident or a patient’s bedside.

Ongoing Commitment to Serve All in Challenging Times The challenges over the past several years have been a clear reminder that we as a community are stronger when we support each other as one team united in service. The COVID-19 pandemic has required a concerted effort of First Responders, medical providers at hospitals, and other caregivers. Further, it has required the actions of every one of us to ensure we can diminish health concerns, particularly to those most vulnerable, while returning our society back to a safe and sustainable balance.

The Mercy Flight Central team is grateful for your support as we have remained at the ready to care for the critically sick and injured.

May we all be committed to integrity, dignity, and respect for all.

Donate Today!

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Financial Insights • 2022

Roland Williams

J2 Medical Supply NFL Super Bowl Champion, Entrepreneur & Philanthropist

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r. Williams has a long history of high performance and transformational impact as a professional athlete, entrepreneur, and philanthropist. He is a graduate of Syracuse University who went on to play in the National Football League for an accomplished eight-year career. Most notably, Mr. Williams was an integral part of the legendary St. Louis Rams’ “Greatest show on Turf” offensive unit, breaking numerous records in route to a Super Bowl victory.

Following his professional football career, Mr. Williams continued to enjoy success with his blueprint of discipline, teamwork, and gratitude.

Whether as a sports analyst for ESPN, NBC & CBS Sports; an international team building and performance expert; or as an entrepreneur successfully launching and scaling multiple startups, his passion and drive have been a catalyst for exponential growth.

As president & co-founder of J2 Medical Supply, Mr. Williams is leveraging more than 30+ years of manufacturing, distribution, and logistics experience in the USA and China to help healthcare, government and business clients maintain product quality and reduce costs while achieving supplier diversity objectives.

j2medicalsupply.com

• • • •

Proud father of three sons Expert in strategic planning, sales, and high-performance team building Graduate of Wharton School of Business Entrepreneurial Program Advisory Board Member of both the Whitman School of Management & David B. Falk College of Sport and Human Dynamics at Syracuse University • Founder & Chairman of Champion Academy Extreme Mentoring, a nonprofit helping hundreds of high-risk teens overcome barriers to succeed as students and citizens.

Fabricio and Deborah Morales Intivity, Inc.

Who They Are Intivity, a certified MBE and Small Disadvantaged Business, is a full-service furniture management company, providing strategic planning, tactical implementation, professional expertise and individualized attention.

What They Do Intivity supports workplaces through the design, sourcing and implementation of their office space and furniture needs, as well as the supplies they need for their daily activities.

Fabricio is the Founder, President and CEO of Intivity, formerly FM Office Express, a full-service office furniture and supplies company operating across NYS. Deborah, Chief Operating Officer, oversees the company operations and employee productivity, building a highly inclusive culture, ensuring that team members thrive and organizational outcomes are met.

Fabricio and Deborah have been married 39 years and reside in Fairport, New York.

Core Competencies SOURCING • Architectural Products • Office Furniture • Office Supplies • Industrial Supplies • Power Distribution INSTALLATION • Furniture Setup & Installation • Project Management • Moves & Relocations • Cleaning & Maintenance • Leasing

intivity.com

DESIGN • Space Design • Facility Assessment • Turn Key Projects • Warehouse/Storage

2022 • champlinandassociates.com

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Champlin & Associates Team Brad Champlin CEO

Brad started his professional career in the United States Air Force from 1979-1987 working in Civil Engineering as an electrician and on the flightline with fighter aircrafts. While in the Air Force, he studied accounting and business. After the Air Force, Brad worked for Fiat Allis and Caterpillar as a mechanic as he prepared himself to buy his own business in 1989.

From 1989 until he started Champlin & Associates, Brad successfully navigated running a business, got his pilot’s license, became the youngest town supervisor in Yates County, serving 5 terms and with his wife, Cindy, had four children. Brad enjoys flying both airplanes and helicopters, riding motorcycles, camping and spending time with his family, especially his 7 grandchildren.

Amanda Williams President

Amanda has grown up in the family business alongside Brad since she was a young girl. She prides herself on her ability to help clients navigate the “white noise” of the financial world and loves to help folks solve problems. Amanda’s passion for helping others goes beyond the office walls where she dedicates time each month with Home Start Hope and Champion Academy.

Amanda is President at Champlin & Associates and a full-time mom. She always has something big in the works with her husband, JR, and their four children who constantly keep her on her toes. Running (besides chasing her kids) is one of her favorite free-time activities!

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Financial Insights • 2022

Jacob Champlin Office Manager

After his active duty in the USMC he returned to Rochester looking for a way to continue to help his community. If Jacob isn’t working hard managing the office and communicating with clients, he is working hard at the gym.

As a powerlifter, his current competition total is 1,603.8 lbs. That includes squat (589.7 lbs), bench (336.2 lbs), and deadlift (677.9 lbs).

Katiulka “Kathi” Norton Business Administrator

She started in 2016 after moving to NY from Colorado, where she co-owned a cafè called Durango Doughworks. She knows how to make a great donut… but we are glad Kathi is a part of our financial team! Fun fact – she grew up in Santo Domingo, Dominican Republic, that’s also where she met her husband. Today they have three children together and love to spend time outdoors.

JR Williams Brand Manager

His passion for work is just as high as his passion for the Pittsburgh Steelers NFL team.

Need the score? Name of a player? When they were born? He’s got it! Find JR watching and wearing Steelers apparel every game day! He’s got his wife, Amanda, and four kids to fully embrace his love of football.

2022 • champlinandassociates.com

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community matters Champion Academy Rochester’s New Normal: Poverty, Trauma and Toxic Role Models

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mong comparable-size cities, Rochester continues to be among the worst in poverty and childhood poverty. One out of three Rochester residents lives in poverty, and more than half of all Rochester children under 18 years of age live below the poverty level.

Each second a teen spends in poverty, the probability increases that he or she will be negatively impacted by one of poverty’s horrific effects: • Substandard housing • Food scarcity • Living in a single-parent household • Drugs, gangs & violence • Substance abuse by a household member • Physical or sexual abuse by a household member ...But We Are Fighting Back The Champion Academy helps urban teens in poverty overcome their traumatic experiences and use them as fuel to drive their improvement as students, citizens and future professionals.

How It All Started Roland Williams was born in Rochester’s challenged 19th Ward and overcame incredible odds to graduate from the Rochester City School District, Syracuse University, and become an NFL legend and Rochester’s first and only Super Bowl Champion. But Roland’s heart has always been bigger than his smile. A lifelong philanthropist, in 2015 he founded the Champion Academy Extreme Mentoring & Empowerment Initiative.

Volunteer Opportunities 1. CHAMPION WELCOME - Celebrate the arrival of students to our programs 2. STUDENT NETWORKING - Interact with student through conversation and games 3. PROGRAM LOGISTICS - Help with setup, food and program coordination 4. PROGRAM AMBASSADOR - Help spread the word 5. CLASSROOM CHECKUPS - Visit a student during the school day and observe

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Financial Insights • 2022

Donate Today!

ChampionAcademyROC.org

American Cancer Society

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he American Cancer Society is a nationwide, community-based voluntary health organization dedicated to eliminating cancer as a major health problem.

Mission The American Cancer Society’s mission is to save lives, celebrate lives, and lead the fight for a world without cancer.

What We Do While most people know us for our research, we do so much more. We attack cancer from every angle. We promote healthy lifestyles to help you prevent cancer. We research cancer and its causes to find more answers and better treatments. We fight for lifesaving policy changes. We provide everything from emotional support to the latest cancer information for those who have been touched by cancer. And we do it all 24 hours a day, 7 days a week.

Connecting With Your Local American Cancer Society The American Cancer Society is proud to offer help and resources no matter where you live.

We can help connect you to patient resources, cancer information, or ways to get involved and give back to your community. We are available 24 hours a day, 7 days a week. Call us at 800.227.2345 or live chat with questions.

Volunteer to Save Lives As an American Cancer Society volunteer, you can honor a survivor or a loved one lost to cancer, help save the lives of people in your local community and around the world.

Overall Impact $5B invested in research since 1946 3.2M patients served in the last decade 16.9M cancer survivors alive today 1M+ cancer screenings in underserved communities.

Rochester Rotary

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ochester Rotary is a diverse service organization for business and civic leaders looking to make a difference in our community.

Today, our members’ volunteer spirit, generosity and commitment to community service remain vibrant.

Through Rotary, Rochester’s leaders strive to achieve our mission of enriching the lives of Rochester’s youth, people with disabilities and of our world neighbors.

In addition to community service, we meet weekly for luncheons featuring expert speakers on the important topics of the day and we hold networking and fun social events.

Rochester Rotary and our more than 350 members are part of Rotary International, which is composed of more than 35,000 clubs with more than 1.2 million members worldwide.

Why Rochester Rotary is the service organization of choice for Rochester’s leaders • Expert speakers • Service opportunities • Fun social events • Business networking • Global reach

Donate Today!

Cancer.org

Get Involved If you are looking to get more involved in the community and network with other business leaders, Rochester Rotary might be the place for you. Please consider becoming a member. While Rotary is an inclusive club for leaders of all backgrounds, there are some basic qualifications for membership.

Candidates must: • Be a committed leader in the community • Be a CEO or senior manager and/or a significant decision-maker within an organization, or a highly regarded member of your profession • Meet the financial responsibilities of Rotary • Participate in Rotary’s activities in the community

Donate Today!

Rochesterrotary.org 2022 • champlinandassociates.com

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insights

10 Debunked Myths of

Financial Planning

By Amanda L. Williams

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avigating the white noise of financial planning can be challenging. We’ve taken some time to debunk some of the most common myths you’ll come across. Creating and managing a financial plan efficiently is easily one of the most impactful things someone can implement into their lives.

Money is a staple in today’s society and access to information is unlimited, which can make it even more difficult to weed through what is true and false.

We hope that you will gain some clarity after reading through the following misconceptions. With that being said, let’s jump right in …

Myth #1: I Don’t Need to Have a Plan Until… or I Don’t Need a Plan Because Too Much Changes Anyway Truth: Procrastination is the action of delaying or postponing something. We too often procrastinate on some of life’s more important planning. We’ve witnessed firsthand the negative impact waiting to plan or even worse, failing to plan, can have on a family or business.

It is so crucial to plan for the many “what ifs” in life as well as the unavoidable such as death. Planning is not always fun or instantly gratifying; it takes work. It may be easier to continue to avoid reality and the “what ifs” of tomorrow, however. “Why are you waiting? Tomorrow isn’t guaranteed.” -Anonymous A plan in fact simplifies your life by keeping you, your family, and your financial goals on track. It establishes clear and actionable steps to keep you moving from Point A to Point B, ultimately helping you reach your destination. Just as you may need to take a detour on a trip, you adjust your plan as your family and financial circumstances change over time.

Myth #2: Financial Planning is Really Just About Investment Management Truth: As times have changed, the word investing has become interchangeable with financial planning in many people’s minds. When you discuss investment management, it is important to address your asset allocation and rebalancing your portfolio, however, that is not all. Taking charge of your investments is only one piece of the puzzle. Experiencing a true financial planning process will help you navigate and coordinate an overall strategy that will incorporate all aspects of your world. Your financial road map should address your income, assets, liabilities, cash flow and how you protect what you own. It will coordinate all the pieces to make sure you’re on track towards your financial goals.

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Financial Insights • 2022

Myth #3: I Don’t Need a Formal Financial Plan If I Always Make Good Financial Decisions Truth: Have you heard “Hindsight is 20-20?” Yes, we have too. If we all knew the right financial decisions to make and when to make them then no one would need a financial plan. The truth of the matter is that’s not possible. We all strive to make good financial decisions but without a well-thought-out plan, it’s almost impossible to make the headway necessary to meet our goals.

Financial planning requires coordination of retirement planning, investment management, cash flow evaluation, tax strategies, estate planning and asset and income protection.

Many people think that buying a product will be a “magic fix” for their money problems and provide for their loved ones.

In actuality, financial planning is complex and requires planning, not just making decisions on a wing and a prayer.

Myth #4: Financial Planning is the Same as Retirement Planning Truth: Creating a financial road map does indeed help you save for retirement; however, retirement is a goal within a plan. We’ve heard repeatedly that folks are “all set” because they’re saving, even maxing out, their retirement plans.

Financial planning is so much more. What happens if you

haven’t created a balance of savings across various buckets and find yourself in a financial pickle during a crisis? If you’ve only saved in your 401(k), IRA or other retirement accounts, you may need to dip into your retirement savings because you don’t have other savings plans in place. This can create unnecessary penalties or expenses that could have been avoided or could limit your options of where to pull money, especially when the market is down, and you need to take money out. Did I mention the tax planning that should be considered when saving towards retirement?

Myth #5: Once You Have a Plan, You’re All Set Truth: Financial planning is always a work in progress. Just as the weather changes, so do your circumstances. Depending on your situation, you may experience small, mild changes while at other times you’ll experience more turbulent times.

Some examples are, income levels, big expenses come and go like purchasing a home or paying for college, risk tolerance decreases as you approach and enter retirement and tax rates across the spectrum are constantly fluctuating. To have the best chance of financial success, your financial plan shouldn’t be a “set it and forget it” model. Instead, it should require frequent review, monitoring, and maintenance to ensure that you’re staying the course.

Myth #6: My Advisor Will Take Care of Everything Truth: Your advisor and their planning platform are not a magic solution. While they are tasked with managing and helping guide you in the right direction, it is ultimately your responsibility to follow through. They should work alongside you as part of your team of professionals to help increase your financial literacy, make it as easy as possible to get things over the finish line and make sure you stay on track. It is important to understand that the planning process starts and ends with YOU. Myth #7: All Financial Advisors are the Same, so I Can Just Pick One at Random Truth: Just as no two days are the same, neither are financial advisors. Each financial advisor team will differ in their planning strategies, philosophies, and the advice they deem appropriate. The industry is heavily regulated to help protect people from receiving bad or inappropriate advice. Transparency, honesty, and integrity are all crucial values that the Financial Advisor you choose should live by. It is important to choose a professional who is openminded and works diligently towards putting together a financial road map that aligns with what YOU need, not what the advisor wants.

Myth #8: Financial Advisors All Charge the Same Way Truth: There are many ways a financial advisor can charge for their services. From earning a commission on a product they sell, to charging a percentage of the money under their management or charging a flat or hourly fee based on the complexity of your planning. There isn’t a right or wrong answer, what is important is that they are upfront about how they get paid and what you can expect to pay for the services you receive.

Myth #9: I Need Someone Local to Me and I’ll Have to Drive to Their Office All the Time to Meet Truth: In today’s world, technology has created more options when it comes to meeting. The ability to meet via a video conference has become a convenience that most enjoy. It allows you to meet from the comfort of your home or work and eliminates the extra travel time. In addition, many advisors have clients throughout the country and technology has made it possible to still meet “face-to-face” even from thousands of miles away.

Myth #10: I Can Do It All On My Own Truth: This may be the biggest misconception out there.

Just as a surgeon cannot handle all aspects of a surgery nor a foreman all the moving pieces of a construction project, it is impossible for one to handle their entire financial world on their own. Even though you should be involved with every decision regarding your financial road map, it is important to rely on others in their field of expertise so they can provide additional support, tools, and advice to help you reach your financial potential.

Financial advisors work day in and day out servicing their clients, creating plans, reviewing benchmarks and investment performance and monitoring progress in an efficient manner.

They can see the bigger picture and have access to more resources and potential strategies than someone who doesn’t do planning as his or her full-time job.

Take Charge of YOUR Financial Future The benefit of taking action today is to avoid unforeseen or undesirable outcomes tomorrow. We help business owners, independent women and career professionals design their dream future, build a plan to set them on the right path and avoid life’s uncertainties through foresight.

To discover any blind spots or unforeseen issues in your financial plan, call us at 585-899-1227 or go to www.ChamplinandAssociates.com to schedule a Financial Road Map Assessment.

Securities offered through J.W. Cole Financial (JWC) member FINRA / SIPC. Advisory services offered through J.W. Cole Advisors, Inc. (JWCA). Champlin & Associates and JWC/JWCA are unaffiliated entities.

2022 • champlinandassociates.com

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Services & Process W

e help Business Owners, Independent Women and Career Professionals reduce taxes, increase income and create a lasting legacy. Champlin & Associates is a Veteran and Woman-owned business that has built a well-rounded team that works with clients and their other professionals to develop their Financial Road Map to Success.

Business Owners You’ve spent years building your successful business and you didn’t get there by not being open to new ideas.

Business owners face unique challenges that non-business owners don’t. Do taxes keep you up at night? Are you confident that your Exit Strategy is air-tight and will work smoothly in calm waters as well as turbulent?

We understand the ins and outs of the business world from tax planning, legacy and wealth transfer, the importance of exit and buy/sell strategies and cash flow efficiency.

Are you working with a team with 50+ years of business owner experience? We offer a complimentary and confidential 57-minute Retirement Lifestyle Assessment. Take action today, tomorrow isn’t guaranteed.

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Financial Insights • 2022

Independent Women

Career Professionals

You are not alone! Independent women are focused on taking care of their families, supporting others when needed and having control over their financial future to make sure they are staying on track with their financial goals.

Career Professionals are driven to succeed in their careers and support their families financially.

There is no time like the present to address longer life expectancy, finding the balance between your career and caregiving, developing a plan for YOUR future and setting yourself and your family up for financial independence and success. We offer a complimentary and confidential 57-minute Road Map to Success Evaluation. Don’t wait, hindsight is 2020.

Is the weight of paying for your mortgage, saving for college education, evaluating your career decisions and having confidence you’re making wise financial decisions weighing on you?

We know how challenging it is to navigate the “white noise” of all the financial information that is available at your fingertips. That’s why we developed and offer a free 57-minute Financial Road Map Conversation. Let us help you sort through the noise today!

2022 • champlinandassociates.com

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insights

Avoiding the

New York Estate Tax Cliff

By Nicholas S. Proukou, ESQ 585-944-9861; nick@kroll-lawoffice.com

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ew Yorkers with estates greater than $6,110,000 are subject to New York Estate Tax. This poses a problem for married couples with assets that may end up exceeding this figure. Failing to employ estate tax planning can result in falling off what practitioners sometimes refer to as the NYS Estate Tax Cliff. This article will briefly summarize this estate tax risk and use of Disclaimer planning to keep married couples from “falling off the cliff.”

The risk is simple. The spouses never update their estate planning documents, all of the assets fall to the surviving spouse, and the surviving spouse now owns assets that exceed $6,110,000. Since the NYS estate tax exemption is a use it or lose it exemption, the failure to use the predeceasing spouse’s exemption leaves the surviving spouse with all of the marital assets and half the estate tax exemption that was otherwise available to the couple.

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Financial Insights • 2022

This problem is compounded by NYS law because estates that exceed the exemption amount are taxed on the entirety of their value; NOT the value of the estate that exceeds the exemption. As a rule of thumb, you can estimate the estate tax due for an estate that exceeds the NYS estate tax exemption as slightly less than ten percent of the gross value of the estate.

Consider a hypothetical couple with combined assets of $6,500,000 equally divided between them. A simple estate plan, leaving everything to the surviving spouse, would result in $574,000 of NYS estate tax on the surviving spouse’s death.

See illustration 1.

Carolyn Reardon, Richard Kroll, Marcus Kroll, Nick Proukou

Illustration 1

Illustration 2

There is no tax illustrated on the first spouse’s death because the assets are passing to the surviving spouse.

This is a result of the “unlimited marital deduction.” The IRS views the spouses as an economic unit and does not impose tax on transfers between the spouses. On the surviving spouse’s death, however, Spouse 2 has a $6,500,000 estate and an exemption of only $6,110,000. Consequently, Spouse 2’s estate has gone over the tax cliff and is subject to $574,000 of NYS estate tax, which could have been avoided with the proper planning.

Disclaimer will planning is one type of estate tax planning that reduces and sometimes eliminate this tax bill altogether. See illustration 2.

As you can see, on the first spouse’s death the survivor can either inherit outright or disclaim into the disclaimer trust. This is an important distinction because the assets in the disclaimer trust are outside of the surviving spouse’s taxable estate, while assets inherited outright are included in the surviving spouse’s taxable estate.

Disclaimed assets can then grow without further exposure to estate tax at the surviving spouse’s death, and help keep surviving spouse’s taxable estate lower. In this example, spouse 2 elects to disclaim the entirety of spouse 1’s estate into the disclaimer trust.

During spouse 2’s lifetime, spouse 2 is in control of the disclaimer trust as the trustee, and may make distributions to him-herself and the children. Thus, during the lifetime of spouse 2, he-she has access to all of the assets in his-her name and the assets of the disclaimer trust.

Spouse 2’s estate is also now less than the NYS estate tax exemption.

Consequently, no NYS estate tax is due on spouse 2’s death. This completely avoids the $574,000 estate tax bill that would have otherwise been due at spouse 2’s death under the simple will plan.

There are many ways to deal with the NYS estate tax (for individuals and married couples alike), but this is one common approach. We at the Kroll Law Firm LLP deal with these issues every day as part of our practice and would be happy to counsel your family in these matters. Please feel free to reach out at any time.

2022 • champlinandassociates.com

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insights

Seven Financial Metrics

Every Entrepreneur And Small Business Owner

Needs To Master I

by Bernhard Schroeder, Forbes

n a meeting last week, a successful serial entrepreneur, who wants to shift to becoming a full-time investor, remarked that he was going back to school to get an MBA at the age of 45. I asked, why? The answer was surprising to me. Even though this entrepreneur had built several companies (north of $50 million in annual revenue) he felt inadequate as a potential investor. Specifically, he cited an inability to read company financial statements, including a balance sheet, etc. in order to determine a company’s health and value.

This made me stop and think. How many other entrepreneurs or small business owners really understand how to read and utilize financial statements or even critical finance metrics in order to determine a company’s health and financial worth? In my career of building a $1 billion company and managing four company turnarounds,

Jodi Lynne Davies joined the banking profession in 1985 with a savings bank.

In 1990 the savings bank was purchased

by M&T Bank and that started her 32 year career with M&T Bank.

Jodi has worked with small businesses in the capacity of a relationship manager since 1999. Her role is to help clients with lending needs, and products that help them to be successful. She provides a partnership and resource for them to access when they are taking on the world of entrepreneurship.

Business and Professional Banking Office- 585-258-8346 jldavies@mtb.com Jodi Davies

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Financial Insights • 2022

I found the following financial metrics below to be invaluable in terms of understanding the business health, let alone potential value. They are simple, yet powerful “key performance indicators” or KPI’s as we called them.

Every business owner needs to know the financial metrics below to run a successful business, let alone invest in one.

Real Revenue: While most people think sales is revenue, revenue by my definition is money received in hand.

If you sell something and don’t get paid right away, it can create the illusion that everything is fine but cash flow is king and without it, you will go out of business.

Gross Margin: Surprisingly, quite a few small business owners don’t exactly know what the gross margin is for their products and services. Here is the definition: Gross margin is a company’s net sales revenue minus its cost of goods sold (COGS). In other words, it is the sales revenue a company retains after incurring the direct costs associated with producing the goods it sells, and the services it provides. You want this number to be above 50% if at all possible.

Real Profit: This is not the amount of money you think you made but the actual real dollars made after all expenses and taxes are paid. When looking at a company’s expenses, make sure the entrepreneur/small business owner is not mixing personal expenses into their business expenses (e.g. car payments, house payments, etc.) to purposely lower the net profit and tax liability. While potentially good for the entrepreneur/small business owner, it distorts the true profit of the company.

Cashflow is King: You can be doing a $1million dollars a month in sales and go bankrupt. If you need to build the product (pay for expenses upfront) and then sell the product through a distribution channel, you will be waiting 60-90 days or longer to get paid. That could be a business model that is unattainable in the long run unless your sales volume is high, you started with a large cash reserve, or

your gross margin is so high (75% or higher) that you can afford the delay in actual received revenue. Cash is the fuel that runs your business; do everything you can to maximize cash flow.

purposely lean. If there is one seminar entrepreneurs and small business owners should all take, it should be one on negotiation. How well you negotiate could impact the future potential of your business.

Accounts Receivable: This is the money that companies owe you.

Often neglected, this is one area of the business it might pay to staff correctly.

I once had a small business owner call me on a Friday to tell me they just paid payroll with their credit card. This was a $2.5 million company. Turns out they had several clients that owed them more than $400,000 and were at least 60 days past due. We hired an accounts receivable contractor, offered them a 10% commission payment on any past due bills they could collect in the next 30 days. They were aggressive without being offensive and collected $320,000 within the next 30 days. If you do the work, make sure you have processes in place to get paid. Remember, cash flow is king.

Employee Utilization: This is one area most people ignore (unless you are in the people services business) and more entrepreneurs and small business owners should pay attention to. If possible, assign a value of “billable or revenue hours” to your employees and measure the employees’ impact on revenue. By doing this, you might just find out where the most revenue contributions are made and how much revenue you can drive per employee before you have to hire another employee to avoid employee burnout.

Accounts Payable: The best advice I can give entrepreneurs and small business owners is to not spend any money. Or at the very least, don’t spend any money that you don’t have to. Avoid leases with no out clause, avoid any equipment that you really don’t need, keep the business

This article was written by Bernhard Schroeder from Forbes and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@ industrydive.com.

Disclosures: This article is not intended to provide tax, legal, accounting, financial, or other professional advice. Always consult a qualified professional about your personal situation.

2022 • champlinandassociates.com

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9 Questions to Ask Before Hiring a Financial Advisor 1. Do the vision and values of

the firm align with yours? Ask to see a copy of the firm’s vision and core values BONUS: statement.

What does the internet say about them?

2. Do they truly

plan or do they Search their name and take a cookiecutter approach see what you find. Do with their clients? they show up on the Ask to see a first page? Lookout sample plan. Are for negative all areas of planning feedback. addressed?

3. Do they have an organized,

streamlined planning process? Ask them to demonstrate the process from start to finish on a piece of paper.

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Financial Insights • 2022

4. What are they expecting

of you and what can you expect from them? Request a detailed engagement letter.

5. How are they compensated?

Ask them what value you will receive for what you are paying.

6. What language are they

speaking? Are they able to explain complex concepts in simple ways?

9. Who is on the team and how will you be interacting with each person throughout your time with the firm? Will you get face-to-face time with the advisor or just a junior associate?

Conclusion: Be an advocate for yourself and your family. Ask the important questions and the answers you receive will be telling on how you and your loved ones will be treated and respected.

7. Do they offer to coordinate

aspects of your planning with your other trusted professionals? Ask who else is part of the team.

8. Are they specialized and

focused on specific niches? Watch out for more than 3 specialties.

Bonus

“We have two ears and one mouth so that we can listen twice as much as we speak,” said Epictetus, a Greek philosopher. Do they listen more than they speak?

Do they focus more on talking about themselves or listening to your biggest concerns, challenges and desires?

what clients say

“W

e decided to move from a large National/ International Wealth Management Firm to a more

Roland Williams

personal firm with a reputation of working closer and tailoring portfolios better to the clients’ needs. Champlin & Associates has all the tools that help us see what is going on, show and explain our position using the tools, and regularly meet with us and advise us on options to advance and protect our position.

They are always available and provide any information needed immediately. In addition, Champlin & Associates have backed us with required professional financial documentation that has helped strengthened our position for other business ventures.

We feel we have a partnership with Champlin & Associates.”

— Jerry Boddy & Rosemarie DiMuro, Fairport, NY

“Champlin & Associates consistently provides winning strategies that have been invaluable for my long-term financial objectives. Brad & Amanda are outstanding people that I’m honored to call friends and teammates.”

— Roland Williams, NFL Super Bowl Champion, Thousand Oaks, CA

“Working with Brad and Amanda over the years has been a pleasure. In each interaction with mutual clients, they bring a level of care that truly goes above and beyond.

The Champlins/ Williams are a great family team and great advisors.”

— Nick Proukou, Esq., Kroll Law Firm, Rochester, NY

“I am

happy to recommend Champlin & Associates as Financial Advisors. My wife, Liz, and I have relied upon their management of our retirement accounts for several years. The results have been far greater than we could have expected.

Their personalized service is such that I have referred many of our law office clients to them.”

— John Tyo, Shortsville, NY

Securities offered through J.W. Cole Financial (JWC) member FINRA / SIPC. Advisory services offered through J.W. Cole Advisors, Inc. (JWCA).

Champlin & Associates and JWC/JWCA are unaffiliated entities. This advertisement contains an unpaid endorsement and/or testimonial.

Unique experience and past performance do not guarantee future results.

Testimonials herein are non-representative of all clients or account performance. Testimonials, statements, and opinions presented are applicable to the individuals depicted.

2022 • champlinandassociates.com

21

Reading Into Success Retire Like A Shark Top North American Advisors Share Keys to Retire Well in the New Book, Retire Like A Shark

T

he number of people retiring spiked in 2020, increasing over 33 percent in the last decade, growing from approximately 34 million in 2010 to over 46 million in 2020, according to Statista.com.

Many successful people are heading into retirement with little or waning confidence.

There are no easy answers to retire in today’s world filled with uncertainty and challenges never before faced by retirees.

Yet, there are tried and true keys, methods, and tips to increase your ability to retire with confidence. That’s the idea behind the newest book, “Retire Like A Shark,” from Kevin Harrington and Scott Keffer. They have assembled an all-star cast of wealth, financial, investment and business advisors from across North America to write a chapter on the keys to retire with confidence, security and joy.

Kevin Harrington, a best-selling author and original Shark on ABC TV’s Shark Tank, and Scott Keffer, a best-selling author and business growth coach, along with their coauthors - Brad Champlin & Amanda Williams; and 33 other top advisors – each contributed an original chapter to the book.

Readers will discover tax, financial, and investment keys, methods and tips, along with an opportunity for additional retirement resources, from over 30 leading authorities.

Retire Abundantly Are You Ready?

Y

ou only retire once, so you might as well get it right. If you are already retired, or just about to retire, do you want to say, “I hope I have just enough money to scrimp and save my way through old age and medical bills so I don’t have to depend on the kids?”

Or… Would you rather say, “I can finally enjoy the life that I promised myself and my family years and years ago?

A life of freedom to become the person you want to be, doing the things you want to do, with the people you want to be with, making the difference you want to make.

If the last option sounds like the best one to you, then you are reading the right book at just the right time. This book is NOT about how to simply retire. (There are tons of books and tons of people who can help you do that.)

This book will show you how to RETIRE ABUNDANTLY.

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Financial Insights • 2022

what clients say

“W

e’ve been working with

“We have found a true partner in our relationship with Champlin & Associates. They go out of their way to collaborate with our accountant and other professionals to be

Champlin & Associates for several years now.

Their knowledgeable

sure we are seeing our entire financial picture. They present options for

staff takes pride in

investment strategies and allow us to choose what we feel comfortable

advising clients in ways

with, they never try to sell us anything. We can pick up the phone

to achieve their financial

at any time to get our questions answered. We know that Champlin & Associates truly care about us! Champlin & Associates truly care about our community. Every one of them gives both personally and professionally, their time, talent and treasure to organizations that are making a difference right here in Rochester.”

— Kristin Mathis & Dr. Vincent Vella, Webster, NY

goals. We truly feel they have our best interest in mind.”

— Kevin & Katy Lang,

Downingtown, PA

Kristin Mathis and Dr. Vincent Vella

Securities offered through J.W. Cole Financial (JWC) member FINRA / SIPC. Advisory services offered through J.W. Cole Advisors, Inc. (JWCA). Champlin & Associates and JWC/JWCA are unaffiliated entities. This advertisement contains an unpaid endorsement and/or testimonial. Unique experience and past performance do not guarantee future results. Testimonials herein are non-representative of all clients or account performance. Testimonials, statements, and opinions presented are applicable to the individuals depicted.

2022 • champlinandassociates.com

23

What’s Next ?

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